Your Directors have pleasure in presenting their Twenty Ninth Annual Report on thebusiness and operations of the Company and the Audited Accounts for the Financial Yearended March 31 2016.
1. Financial Summary/Performance of the Company
The summary of standalone (Company) and consolidated (Company and its subsidiaries)operating results for the financial year under review along with the figures for previousyear are as follows: (Rs. in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||31.03.2016 ||31.03.2015 ||31.03.2016 ||31.03.2015 |
|1. Net Sales / Income from Operations ||13886.15 ||11640.56 ||17382.52 ||12710.40 |
|2. Other Income ||224.83 ||112.11 ||179.33 ||68.73 |
|3. Total Income (1+2) ||14110.98 ||11752.67 ||17561.85 ||12779.13 |
|4. Total Expenditure ||12059.93 ||9596.02 ||14443.89 ||10356.21 |
|5. Operating Profit before Finance Cost Depreciation Tax and Minority Interest (3-4) ||2051.05 ||2156.65 ||3117.96 ||2422.92 |
|6. Finance Cost ||485.67 ||481.04 ||799.47 ||679.75 |
|7. Depreciation ||458.67 ||359.08 ||543.09 ||426.68 |
|8. Profit before Tax and Minority Interest (5-6-7) ||1106.71 ||1316.53 ||1775.40 ||1316.49 |
|9. Provision for Taxation ||401.65 ||368.70 ||560.85 ||415.51 |
|10. Net Profit after Tax and before Minority Interest (8-9) ||705.06 ||947.83 ||1214.55 ||900.98 |
|11. Minority Interest ||- ||- ||123.38 ||27.88 |
|12. Net Profit after Tax & Minority Interest (10-11) ||705.06 ||947.83 ||1091.16 ||873.10 |
Notes: 1. The previous year figures has been regrouped wherever necessary.
2. Performance Review
Yet again Acrysil recorded the highest ever sales during the year. The Companyundertakes aggressive sales promotion activities to create strong brand awareness and alsotook several growth initiatives to increase volumes during the year. As a result thecompany had a year of impressive performance with Sales Turnover (Standalone basis)increasing by 19.29% to Rs. 13886.15 lakhs as against Rs. 11640.56 lakhs in the previousyear. Net Profit (Standalone basis) for the year declined from Rs. 947.83 lakhs in theprevious year to Rs. 705.06 lakhs in FY16.
On consolidated basis Sales turnover of your Company for the year was Rs. 17382.52Lakhs as against Rs. 12710.40 Lakhs in the previous year. The Consolidated Profit beforeTaxation and Minority Interest was Rs. 1775.40 Lakhs against Rs. 1316.49 Lakhs in theprevious year. The Consolidated Profit after Tax and Minority Interest was Rs. 1091.16Lakhs against Rs. 873.10 Lakhs in the previous year.
Your company is rewarding its shareholders by way of consecutive cash dividendsconsidering the consistent financial performance of your Company and promising futureprospects while retaining capital to maintain a healthy Capital Adequacy Ratio and tosupport future growth. In view of the good financial performance of your Company theBoard of Directors in its meeting held on May 23 2016 has recommended a final dividendof 50% (Rs. 5.00 per Equity Share of Rs. 10/- each) on Equity Shares of 10/- for thefinancial year ended March 31 2016. The proposal is subject to the approval ofshareholders at the ensuing Annual General Meeting.
4. Material Changes Transaction and Commitment/Change in the Nature ofBusiness if any
There are no material changes and commitments affecting the financial position of theCompany for the year under review. During the year under review no significant ormaterial order was passed by the Regulators or Courts or Tribunals which impact the goingconcern status and Companys operations in future.
5. Management Discussion and Analysis (MDA)
Management Discussion and Analysis Report as prescribed under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is presented in separate sections formingpart of the Annual Report.
6. Share Capital
During the year under review 530976 equity shares of the face value of Rs. 10/- eachwere issued and allotted on preferential basis. Consequent thereto total paid up equityshare capital of the Company as on March 31 2016 stands at Rs. 51889760 divided into5188976 equity shares of Rs. 10/- each.
During the year the Company has neither issued shares with differential voting rightsnor granted stock options or sweat equity.
7. Transfer to Reserves
The Company proposes to transfer Rs. 300.00 Lakhs to the General Reserves. An amount ofRs. 1303.98 Lakhs is proposed to be retained in the Statement of Profit and Loss ofstandalone financials.
8. Subsidiary Companies
As on March 31 2016 the Company has six subsidiaries including two overseassubsidiaries one step down overseas subsidiaries. All the said subsidiaries of theCompany remained operational during the year under review. There has been no materialchange in the nature of the business of the subsidiaries. Financials of subsidiaries aredisclosed in the consolidated financial statements which forms part of this AnnualReport. Pursuant to sub-section (3) of section 129 of the Act and Rule 8(1) of theCompanies (Accounts) Rules 2014 the statement containing the salient feature of thefinancial statements of a Companys subsidiaries in Form AOC-1 is attached to thefinancial statements.
Pursuant to the provisions of section 136 of the Companies Act 2013 the financialstatements of the Company consolidated financial statements along with relevant documentsand separate audited accounts in respect of subsidiaries are available on the website ofthe Company.
Further the Annual Accounts and related documents of the subsidiary company shall bekept open for inspection at the Registered Office of the Company. The Company will alsomake available copy thereof upon specific request by any Member of the Company interestedin obtaining the same. Further pursuant to Accounting Standard AS-21 issued by theInstitute of Chartered Accountants of India Consolidated Financial Statements presentedby the Company in this Annual Report include the financial information of its subsidiary.
During the year no company become Companys Subsidiaries joint ventures orassociate companies during the year;
There were no companies which have ceased to be companys subsidiaries jointventures or associate companies except Acrysil International Limited Hongkong which hasceased to be Companys subsidiary during the year under review.
9. Directors and Key Managerial Personnel
The Board of Directors of the Company is led by the Executive Chairman and comprisessix other Directors as on March 31 2016 including one Chairman and Managing Directorfive Independent Directors and one Non-Executive Director (other than IndependentDirectors).
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Shri Chirag Ashwin Parekh Director of the Company retires byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment.
During the year under review the members in their 28th Annual General Meeting held onSeptember 25 2015 approved the appointment of Shri Arjun Handa as an Independent Directorwho is not liable to retire by rotation.
Shri Shyam H. Mariwala and Smt. Shetal C. Parekh tendered their resignations from theBoard of Directors effective from May 2 2016 and May 23 2016 respectively.
The Board of Directors has appointed Dr. Sonal Ambani [DIN:02404841] as an IndependentDirector of the Company from May 23 2016 to March 31 2021 on non-rotational basissubject to approval of the shareholders. Dr. Sonal Ambani was appointed as an AdditionalDirector who shall hold office upto the ensuing Annual General Meeting. Based on thedisclosures provided by her she is not disqualified from being appointed as Director asper Section 164 of the Companies Act 2013. The Board of Directors at its meeting held onMay 23 2016 has also appointed Dr. Sonal Ambani as a member of the Audit CommitteeNomination & Remuneration Committee & Corporate Social Responsibility Committee.The terms and conditions of appointment are placed on the website of the Companywww.acrysilcorporateinfo.com.
Mr. Chirag A. Parekh Chairman and Managing Director Mr. Damodar Sejpal CompanySecretary and Mr. Anand H. Sharma Chief Financial Officer are the "Key ManagerialPersonnel" of the Company pursuant to Section 2(51) and 203 of the Companies Act2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
Apart from this there were no changes in the Directors or Key Managerial Personnelduring the year under review.
The brief resumes and other relevant documents of the Directors being appointed /re-appointed are given in the Explanatory Statement to the Notice convening the AnnualGeneral Meeting for your perusal. a. Board Meetings
During the year 8 (Eight) Board meetings were held with gap between Meetings notexceeding the period prescribed under the Companies Act 2013. Details of Board and Boardcommittee meetings held during the year are given in the Corporate Governance Report whichforms part of the Annual Report.
Board meeting dates are finalised in consultation with all directors and agenda papersbacked up by comprehensive notes and detailed background information are circulated wellin advance before the date of the meeting thereby enabling the Board to take informeddecisions. A detailed presentation is also made to apprise the Board of importantdevelopments in industry segments business operations marketing products etc. b.Independent Directors Familiarization Programme
As per requirements under the Listing Agreement the Company undertook directorsfamiliarization programme for Independent Directors in order to familiarise them withbusiness model management structure product portfolio Industry overview manufacturingoperations internal control system and processes FOREX management risk managementframework functioning of various divisions HR Management CSR activities etc. Thedetails of such familiarization programmes for Independent Directors are posted on thewebsite of the Company and can be accessed athttp://www.acrysilcorporateinfo.com/public/upload/pdf/9390FamiliarisationProgrammeforIndependentdirectors.pdf. c. Evaluation of BoardCommittees and Directors
In line with the statutory requirements enshrined under the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardcarried out a performance evaluation of itself its Committees the Chairman and each ofthe other Directors on the basis of framework approved by the Nomination and RemunerationCommittee.
Independent Directors at a separate meeting evaluated performance of theNon-Independent Directors Board as a whole and of the Chairman of the Board. The mannerin which the evaluation has been carried out has been detailed in the Corporate GovernanceReport which forms part of the Annual Report. d. Policy on Appointment and Remuneration ofDirectors
The Board on the recommendation of the Nomination & Remuneration Committeeformulated criteria for determining Qualifications Positive Attributes and Independenceof a Director and a Policy for remuneration of Directors Key managerial Personnel andsenior management. The Board has formulated Nomination and Remuneration Policy is postedon the website of the Company and can be accessed athttp://www.acrysilcorporateinfo.com/public/upload/pdf/14962328Nomination%20&%20Remuneration%20Policy.pdf. e. Declaration by IndependentDirectors
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
a. Statutory Auditors
The Companys Auditors M/s. Sanghavi & Co. Chartered Accountants (FirmRegistration No.109099W) have completed more than ten years as Statutory Auditors of theCompany. In accordance with the provisions of Section 139 of the Act and Rules made thereunder they can continue as Auditors for a further period of one year i.e. upto March 312017. On the recommendation of the Audit Committee it is proposed to ratify theirappointment from the conclusion of 29th Annual General Meeting till the conclusion of 30thAnnual General Meeting.
M/s Sanghavi & Co. Chartered Accountants have informed to the Company that theirratification for appointment if made would be within the limits prescribed under section141 of the Act. They have also furnished a declaration confirming that their independenceas well as their arms length relationship with the Company and that they have nottaken up any prohibited non-audit assignments for the Company.
The Board has duly reviewed the Statutory Auditors Report and the observationsand comments appearing in the report are self-explanatory and do not call for any furtherexplanation /clarification by the Board of Directors as provided under section 134 of theAct. b. Cost Auditors
Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit)Amendment Rules 2014 the cost audit records maintained by the Company in respect of itsKitchen Sinks under other manufacturing activity are required to be audited by costauditors. The Board has on the recommendation of the Audit Committee appointed M/s. S. K.Rajani & Co. Cost Accountants (FRN: 101113) to audit the cost accounts of the Companyfor the financial year 2016-17 on a remuneration of Rs. 60000/- subject to ratificationby members. Accordingly a resolution seeking Members ratification for theremuneration payable to M/s. S. K. Rajani & Co. Cost Accountants (FRN: 101113) isincluded at Item No. 6 of the Notice convening the Annual General Meeting.
Your Company submits its Cost Audit Report with the Ministry of Corporate Affairswithin the stipulated time period. c. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. P.P. Shah & Co. a firm of Company Secretaries in Practice to conductthe Secretarial Audit of the Company. The secretarial audit report for the financial year2015-16 forms part of the Annual Report as Annexure VI to the Boards report.
The Secretarial Audit Report is self-explanatory in nature and do not require anyfurther comments and explanations.
The Board has appointed M/s. P.P. Shah & Co. Practicing Company Secretaries assecretarial auditor of the Company for financial year 2016-17. d. AuditorsCertificate on Corporate Governance
As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the auditors certificate on corporate governance is form part of AnnualReport. The auditors certificate for financial year 2015-16 does not contain anyqualification reservation or adverse remark.
11. Internal Control System and Compliance Framework
The Company has an Internal Control System commensurate with size scale andcomplexity of its operations. The internal financial controls are adequate and areoperating effectively so as to ensure orderly and efficient conduct of businessoperations.
The Company has appointed M/s. Pramod Shah & Associates as Internal Auditors ofthe Company. The Audit Committee in consultation with the internal auditors formulates thescope functioning periodicity and methodology for conducting the internal audit. Theinternal auditors carry out audit covering inter alia monitoring and evaluating theefficacy and adequacy of internal control systems in the Company its compliance withoperating systems accounting procedures and policies at all locations and submit theirperiodical internal audit reports to the Audit Committee. Based on the internal auditreport and review by the Audit committee process owners undertake necessary actions intheir respective areas. The internal auditors have expressed that the internal controlsystem in the Company is robust and effective.
During the year Internal Financial Controls (IFC) testing process was done in order toreview adequacy and strength of IFC followed by the Company. As per the assessment thereare no major concerns and Controls are strong.
The Board has also put in place requisite legal compliance framework to ensurecompliance of all the applicable laws and those systems are adequate and operatingeffectively.
12. Audit Committee
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report. The Board accepted the recommendationsof the Audit Committee whenever made by the Committee during the year.
13. The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013.
In line with The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and Rules made there under the Company has adopted a "Policy onPrevention of Sexual Harassment at Workplace" There is no complaint related to theSexual Harassment received during the year under review.
14. Risk Management and Policy on Risk Management
Company has implemented an integrated risk management approach through which it reviewsand assesses significant risks on a regular basis to help ensure that there is a robustsystem of risk controls and mitigation in place. Senior management periodically reviewsthis risk management framework to keep updated and address emerging challenges.
Major risks identified for the Company by the management are Currency fluctuationCompliance Regulatory changes Manufacturing & Supply Litigation InformationTechnology and new capital investments return. The management is however of the view thatnone of the above risks may threaten the existence of the Company as robust Riskmitigation mechanism is put in place to ensure that there is nil or minimum impact on theCompany in case any of these risks materialise.
The Board of Directors has also adopted a formal Risk Management policy for theCompany whereby risks are broadly categorized with the parameters of identificationassessment monitoring and mitigation of various risks. Policy on Risk Management isposted on the website of the Company and can be accessed athttp://www.acrysilcorporateinfo.com/public/upload/pdf/1902risk-management-policy.pdf.
15. Vigil Mechanism
The Company has set up vigil mechanism viz. Whistle Blower Policy to enable theemployees and Directors to report genuine concerns and irregularities if any in theCompany noticed by them. It is posted on the intranet of the Company. The same isreviewed by the Audit Committee from time to time.
16. Related Party Transactions and Policy on Related Party Transactions
All related party transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business. As provided undersection 134[h] of the Companies Act 2013 and Rules made there under disclosure ofparticulars of material transactions with related parties entered into by the Company inthe prescribed format is annexed to this report as Annexure - III.
The Board has formulated Policy on Related Party Transactions and posted on the websiteof the Company and can be accessed at(http://www.acrysilcorporateinfo.com/public/upload/pdf/5203related-party-transcation-policy.pdf).
None of the Non-Executive Directors has any pecuniary relationship or transactions withthe Company other than sitting fees and commission payable to them.
17. Managerial Remuneration and Particulars of Employees
The details pertaining to Remuneration as required under Section 197 (12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report and statement of particularsof employees is annexed as Annexure IV.
The Company continues to carry adequate insurance cover for all its assets againstforeseeable perils like fire riot earthquake floods terrorism etc. and other riskswhich are considered necessary by the management. In addition to this coverage astatutory Public Liability Insurance Policy has been taken to cover the company forproviding against the Public liability arising out of Industrial accidents for employeesworking in plants.
19. Loans Guarantees Or Investments
Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Act are given in the notes to the Financial Statements.
20. Corporate Social Responsibility (CSR)
In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has establishedCorporate Social Responsibility (CSR) Committee and statutory disclosures with respect tothe CSR Committee and an Annual Report on CSR Activities forms part of this Report asAnnexure II.
Your Company has not accepted/renewed any deposits from the public and the shareholdersof the Company and has repaid all the deposit outstanding at the beginning of the year andthere has been no default in repayment of deposits or payment of interest thereon duringthe year falling within the purview of Section 73 of the Act read with the Companies(Acceptance of Deposits) Rules 2014 as such no amount of principal or interest wasoutstanding as of the Balance Sheet date.
22. Extract of the Annual Return
As per the provisions of section 92 of the Act an extract of the Annual Return inthe prescribed form MGT-9 is attached to this report as Annexure - I.
23. Directors Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors confirm: a. that in the preparation of theannual accounts for the year ended March 31 2016 the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures if any; b.that the directors had selected accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year ended March 312016 and of the profit of the Company for that period; c. that proper and sufficient carehas been taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; d. that the annualaccounts/financial statements have been prepared on a going concern basis; e. that properinternal financial controls were in place and that the financial controls were adequateand were operating effectively; f. that the Directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
24. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The information relating to Conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134 of the Act read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 is furnished in Annexure VII and forms part of thisreport.
25. Corporate Governance
Your Company upholds the standards of governance and is compliant with the CorporateGovernance provisions as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 in both letter and spirit. The Companys core valuesof honesty and transparency have since its inception been followed in every line ofdecision making. Setting the tone at the top your Directors cumulatively at the Boardlevel advocate good governance standards at Acrysil.
Parameters of Statutory compliances evidencing the standards expected from a listedentity have been duly observed and a Report on Corporate Governance as well as theCertificate from Statutory Auditors confirming compliance with the requirements of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forms part of theAnnual Report.
26. Human Resource
Your Company firmly believes that employees are the most valuable assets and keyplayers of business success and sustained growth. Various employee benefits recreationaland team building programs are conducted to enhance employee skills motivation as also tofoster team spirit. Company also conducts in-house training programs to develop leadershipas well as technical / functional capabilities in order to meet future talentrequirements. Industrial relations were cordial throughout the year.
27. Disclosures under Section 134(3)(l) of the Companies Act 2013
Except as disclosed elsewhere in this report there have been no material changes andcommitments which can affect the financial position of the Company occurred between theend of the financial year of the Company and date of this report.
28. Transfer to Investor Education and Protection Fund
Pursuant to the provisions of Section 205C of the Companies Act 1956 your Company hastransferred Rs. 283206/- during the year to the Investor Education and Protection Fund.This amount was lying unclaimed/unpaid with the Company for a period of seven years afterdeclaration of Dividend for the financial year ended 2007-08.
29. Listing of Shares
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations were effectiveDecember 1 2015. Accordingly all listed entities were required to enter into the ListingAgreement within six months from the effective date. The Company entered into ListingAgreement with BSE Limited on January 11 2016.
30. Gratitude & Acknowledgments
Your Directors place on record their earnest appreciation for the unstinted commitmentdedication hard work and significant contribution made by employees across the globe inensuring sustained growth of the Company.
Your Directors also sincerely thanks all the stakeholders business partnersgovernment other statutory bodies banks financial institutions analysts andshareholders for their continued assistance co-operation and support.
By order of the Board of Directors
Chirag A. Parekh
(DIN: 00298807) Ahmedabad August 8 2016
Chairman & Managing Director
B-307 Citi Point J.B. Nagar Andheri Kurla Road Andheri (East). Mumbai - 400 059.
Tel: (91-22) 4015 7817 / 7818 / 7819
Fax: (91-22) 2825 8052.
Website: www.acrysil.com / www.acrysilcorporateinfo.com